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hi, everyone. welcome to the "journal." the headlines at this hour, secretary of state hillary clinton announces a new u.s. sanctions against north korea. german chancellor angela merkel defends her government pause performance amid slumping approval ratings. and astronomers find a massive star, 10 million times brighter than the sun. the united states says it is
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imposing new sanctions on north korea to try to discourage it from behaving provocatively. u.s. secretary of state hillary clinton announced the talks after talks with south korean leaders in seoul, following p'yongyang's alleged sinking of a naval vessel in march. it targets luxury items, and the sale or purchase of arms. . >> hillary clinton and robert gates in the demilitarized zone. it is a symbolic visit, one of a number of visits to show support for the south following the alleged attack on the south korean warship. gates used the opportunity to point out problems in the north. >> it is stunning how little has changed, and yet how much south korea has continued to grow. the north, by contrast, is in isolation. >> north korea's nuclear program
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is another stumbling block in its relationship with the outside world. clinton says she hopes the new sanctions will persuade p'yongyang to end efforts to build atomic weapons and to change its political course. >> north korea can stop its provocative behavior, it's stress, and belligerence toward its neighbors, take irreversible steps to fulfil its denuclearization commitment and comply with international law. if north korea chooses that path, sanctions will be lifted. a m in the short term, tensions will escalate as the u.s. and south korea prepared to mount large-scale joint military exercises, a move the north's only major ally, china, is cause of great concern. china is experiencing its deadliest flooding in more than a decade, more than seven hotter
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people killed in floods and landslides in central and southern china -- 700 people killed in floods and landslides in central and southern china. thousands of homes have been destroyed and 8 million people have been evacuated. a typhoon over the south china sea is expected to make landfall this weekend, bringing more downpours. iraqi police say a car bomb has exploded, killing at least 13 people and wounding 26. the blast happened in a crowded market about 10 kilometers east of the city. explosion also caused a building to collapse. it was the third bombing in the area it in as many days. german chancellor angela merkel has defended her government's policy despite an historic slump in its approval ratings. in a press conference, merkel admitted that in fighting had cost her coalition much support. she said she was confidence --
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confident our economic performance would regain voter trust. >> few politicians could use a vacation more right now and angela merkel. she begins the summer break with her government plummeting in the polls. her party coalition with the democrats has slumped to 34% approval rating, a record low. she is also -- she has also seen an exodus of top conservatives. even so, she appeared surprisingly on worried. >> every year, i am happy to set off on holidays. >> she also defended her government's handling of the economic and greek debt crisis. she stressed there were more reforms to be implemented. >> we will have plenty of work in the coming what months. >> on top of that, the chancellor will also be looking to downsize the country's armed forces.
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the opposition as promising to keep the pressure on the government. >> we can expect a hot water mark in the summer because this government has not solved any of the problems it set out to. >> on the streets, opinions were far from positive about the government's performance. >> i have disagreed with them. >> it looks especially chaotic. it is impossible to see what they're doing right now. >> the government does not look particularly good, but they have earned their holiday. >> despite the setback, merkel said she is not considering resigning her post. >> i decide it step by step. rest assured you will see me after the holidays. >> while she takes a break from the daily business of government, behind the scenes she is sure to be concerned about getting her crisis-ridden
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coalition back on track. the sudanese president has arrived in chad on his first visit to a full member state of the international criminal court. he has been indicted by the icc for war crimes and crimes against humanity. the court says as a member state, chad is obliged to arrest him. for its part, chad says it is not under any obligation torres the president and he would be returning home after the summit he is attending. washington says the ruptured oil well in the gulf of mexico could be sealed for good within the next two weeks. bp, which owns the well, and the u.s. government say that efforts to remain on target for completing a relief well that would seal off the leak at roth that allen has dismissed fears that the cap is buckling under
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pressure. there are 27,000 used wells in the gulf of mexico. >> 27,000? wow. >> 27,000. financial reform is now the lot of the land in the united states. president obama approved the most sweeping reform of financial markets and regulators since the great depression. it is the result of a year-long political battle to change the way america's banks do business, and hopes of preventing another financial crisis. of the federal government will have power to unwind failing institutions and the u.s. fed will house a consumer financial protection bureau. the reform passed despite strong resistance from wall street and many republicans. here is what obama said wednesday. >> soon after taking office, i
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proposed a set of reforms to empower consumers and investors to bring the shadowy deals that caused this crisis into the light of day, to put a stop to taxpayer bailouts once and for all. today, thanks to a lot of people in this room, those reforms will become law of the land. i>> earlier, i spoke with our wall street correspondent and asked if he thinks reform can prevent another financial meltdown. >> that is the big criticism from some members of the financial community, that the bill does not go far enough. one member was rather disappointed that in the last second, the bill got changed, especially the volcker role is
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not as strong as originally planned. and other financial -- another financial disaster will not be automatically prohibited, and there is some criticism that this bill actually could have been stronger. stellar results for morgan stanley announcing second quarter profits of $1.5 billion, the result a stark contrast to its rival goldman sachs, which announced lower- than-expected profit tuesday. morgan stanley's c.e.o. but the strong performance down to a fresh strategy that includes taking on hundreds of new stock brokers to help the bank win new business. the company also benefited from a one-off. under $50 million tax rebate. european stock markets spent much of the date rallying, technology leading the way it after apple announced a jump in profit up 70%, the best report
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ever from apple. >> apple numbers were better than expected, and they went down pretty well here on the frankfurt floor. while investors focused on shares of companies that deliver for apple, like chip maker in finney and. -- like chipmaker infineon. their shares have been up, the market in general has been up, too, also driven by good numbers coming from morgan stanley. but the market also shows uncertainty. near the end of the session, some profit-taking started. >> talking about the secrets at apple. looking at the final market numbers, the dax index finished up. similar story for the euro stoxx
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50, finishing in positive territory. in new york, investors listening careful to ben bernanke, beginning two days of testimony about the u.s. economy before a congressional committee. the dow jones is down 1%. on the currency markets, the euro is $1.2767. 1 billion euros over the next five years. that is how much porsche will invest in new plants and products, hoping to make big synergy savings to its close cooperation with volkswagen. they're not yet ready to say the company's plans will mean new jobs, they have promised there will be no job cuts in the next five years. the italian carmaker fiat said it doubled second quarter profit, six under 50 million euros, pointing to higher sales of its truck and tractor units,
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making up for slower demand on the car markets. the company says its cost-saving measures are also paying off. fiat says its four-year balance remains unchanged, but it hopes to revise its forecast up after the third quarter. the strike's over the skies over french airports have been unusually quiet this wednesday. air traffic controllers staged a one day strike to protest reforms of how european traffic is managed. french air traffic controllers fear they will lose their job and benefits. hundreds of flights have been canceled, with paris especially hard hit. >> french air traffic controllers say it is a protest against the single european sky project that would unify europe's air force -- eric authority to settle their part. they feared could lead to job losses. >> you can clearly identify
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there are alternative solutions to put these changes in place. we don't contest those, but we're only asking other solutions be taken into account. >> the strike started tuesday evening and is expected to continue until thursday morning. we turn our attention to africa, where at least 10 people have died and dozens are missing after re ferry capsized but like viktoria in uconn debt. it was sailing -- after a ferry capsized on lake victoria imn uganda. boats capsize frequently on lake victoria because of rough weather conditions and poorly maintained ships. a new study says international efforts to prevent piracy off the coast of somalia has not been effective. it says international naval vessels in the region have failed to deter pirates and the
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attacks have actually increased. as we report, some shipping companies are looking at other ways to increase security. >> the german navy is being deployed off the horn of africa. its mission is to protect vessels in the region. a study by the german institute for economic research says parts are not deterred by the navy's presence. >> you cannot monitor it. it would not be financially viable. >> shipping companies are demanding better protection for their vessels. >> in the future, we like to see armed personnel on board. under the conditions, it is from the navy and the police, not private contractors. we are happy to make a financial contribution as long as it is affordable. >> securing the shipping routes
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is the responsibility of the german armed forces and the international community. in some cases, private contractors are being employed. when it comes to us, we have a clearly defined mandate. to mix them could mean things would get into murky territory. >> there is doubt as to whether german soldiers can provide security for private companies. the institute says the only way to combat privacy is to have a functioning somali coast guard. a team of british astronomers have identified the most massive star on record. it was the largest of several giants discovered in a neighboring galaxy. the star burns 10 million times brighter than the sun and exceeds what many scientists thought was even possible. >> the discovery was used to use it -- was made using a european
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space observatory in chile. astronomers can across somethexe very large telescope. the massive star is 300 times that of our own sun and it shines 10 million times brighter. for the astronomers involved, the discovery opens up a whole array of new questions. >> until recently, people assumed there was a fundamental limit to how massive a start could be. they thought it was 150 times the mass of our son, which is quite large. so the fact that we have something that exceeds the limits of how much a star can be really poses more questions than answers. >> those of the questions the scientists will be tackling, and they plan to continue scouring the universe for more colossal stars. stay tune for in-depth
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coming up next. we will look at stress tests for european banks.
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executives from europe's 20 major banks met with the european central bank president on wednesday to assess just how healthy they are. they have undergone stress tests, and the results of which are due friday. they are an assessment of the bank's capital to see if they can survive if for example laky borrower defaults on a loan. a similar stress tests in the united states are widely credited with having restored confidence in the u.s. banking sector, but critics here say the european tests are too easy. >> this is a stress test, a bit like school. who will pass, that is the big question. some tests are harder than
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others. the banks have to prove they can stand up to extreme events. the stress test involves a scenario whereby government bonds of several eurozone countries dramatically lose value. many banks hold billions of euros in such bonds. business is going to bankruptcy and trigger credit defaults. some of criticized the test scenario does not include a state bankruptcy. that is something they say should no longer be considered unthinkable. but the european union argo's a state bankruptcy have been left out for good reason. they insist it is virtually impossible. nonetheless, critics say those
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who devised the exam should be sent back to school. they claim the tests are so easy that no bank can possibly fail. they questioned the effectiveness and reliability of such assessments. formerly, a bank tests repasses the tests if it has enough reserves, at least 6% of its loans. that is what the examiners believed to be sufficient security. but unlikenchl,a ba fails the tt,ca creasingts reserves ea krup>> i a these eecvet inhe.s
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thank you for wching. thank you for joining us. stay tuned. captioned by the national captioning institute captioned bye national captioning institute -- early cloud34eges celsius. the'e miurensneclds and rain. elsewhere, but warm weather will coin touou much of the continent with clouds move again and a chance of rain in poland now here's a look athe forecast for selected cities around the world.
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